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B-114873 1 (1972-06-22)

handle is hein.gao/gaobaagjd0001 and id is 1 raw text is: COMPTROLIER GENERAL OF THE UNITED WASHINGTON. D.C. 20548 ) f B-114873 JUN 2 2 1972 Dear Mr. Chairman: LM0960. In accordance with your request of October 6, 1971, and subs'equent discussions with our representatives, we reviewed, the rqr1_.o.oing, li-nprogx-am of the Farmers Home Adminis- / 5 tration (FHA), Department of Agriculture, in five States to - 2 determine whether: --FHA county office employees had shown favoritism to certain contractors and material suppliers by requir- ing borrowers to use these contractors and suppliers. --FHA county office employees had shown favoritism to certain private attorneys in assigning them to assist borrowers in loan settlement proceedings. --FHA's administration of building specifications had been inadequate because contractors had been required to meet varying building specifications when prepar- ing bids for FHA-financed houses. --FHA had made loans on a first-come-first-served basis. The five States--Arkansas, California, Georgia, Indiana, and Oklahoma--selected for review represent a good cross sec- tion of States with regard to geographic location and size of the program. About 226,000 rural housing loans totaling $2.6 billion were made by FHA nationwide during fiscal years 1969-71. Seventeen percent or about 39,000 of these loans, totaling $421 million, were made in these five States. We visited the FHA State office in each State, and a total of 15 selected FHA county offices--two or more in each State. Our review covered 22 counties.l We reviewed FHA's policies, procedures, and practices and certain reports of the -Department's Office of the Inspector General relating to iThe counties were: Clay, Craighead, Lee, Randolph, and St. Francis Counties in Arkansas; Alameda, Monterey, San Benito, San Francisco, San Mateo, Santa Clara, Santa Cruz, Stanislaus, and Tuolumne Counties in California; Gordon and Walton Counties in Georgia; Lawrence and Monroe Counties in Indiana; and Grady, Noble, Oklahoma, and Ckmulgee Counties in Oklahoma. 70 1f/0 c7 'P

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